Gorillas, Chimps and Monkeys

[ The importance of getting the right staff mix in your real estate business ]
by John Knight Published

I have never heard a principal of a real estate business say they are satisfied with the performance of their business. It is an industry driven to always strive to do things better, to always strive for more [one of the reasons I love working in the real estate industry so much].

One area which never seems to get enough attention though is staff mix. It is easy to focus on top line income and commission structure [they are both very important] but staff mix is a hidden driver of profitability in your business. I always harp on about knowing your average rate of commission because it is the indicator of performance that pulls together so many factors. If you have different commission rates payable depending on individual performance, you also need to be aware of your staff mix.

We have all heard warnings about not having too many gorillas in the office. They can be great for market share and brand awareness but many times I have seen their strength and confidence build so much they start to have a negative impact on culture. When this happens, trouble is brewing! Often, the first sign is a salesperson coming to the principal and saying something like this;

“Gees I have had a good month/quarter/year, probably time to start looking at increasing my commission rate. I am such a big part of this business now.”

Don’t get me wrong, gorillas can be great for an office. But when a business becomes too reliant on one or two big gorillas, it can undermine the stability of the business and comradery of the team. You also need some chimps and monkeys.

GORILLAS ARE:

  • Big, dominant individuals within the office – often they can do 20-30% of the total office sales [and don’t they let you know it].
  • They probably have a few assistants running around after them making sure they are happy and helping get their tasks done.
  • Often the % profit you make on these guys is low but the volume makes up for it when you look at profit by $ contribution [but keep an eye on this because it can change the other way].
  • Exert their strength with force when they want something [known for the odd temper tantrums too].
  • Other team members may have a whinge about them but the principal backs off because they are scared of losing them.

CHIMPS ARE:

  • Hard working team players – always focused on what is best for the group.
  • Still have ambition and one day may challenge the gorillas in the group. These guys come into their own when the gorilla leaves and often 1 or 2 of them will step up in such an event.
  • Smart enough to know they have a lot to learn still. Are usually very good at taking on board feedback and thrive on quality training and development [especially from the Principal of the office].
  • These guys are usually quite % profitable but still need a minimum volume to make a reasonable $ profit contribution. They pay their share of the costs of opening the doors and when they perform you see it on the bottom line.

MONKEYS ARE:

  • Sorry but sometimes the monkeys are a little annoying – they steal your time and it can take a long time to trust that they are team players heading in the same direction as the rest of the team.
  • You need some monkeys around the place – they fill in the gaps in business [like taking open houses for you], clean up after you and one day grow into Chimps.
  • If they perform, these can be the most profitable as a % but while they are still on a retainer or salary they are always at risk of slacking off and being distracting by the next shiny new thing.
  • Not all monkeys are in it for the long haul, but those that embrace the culture and the investment in their skills will be a great asset.

SO, WHAT IS THE PERFECT STAFF MIX?

I have seen it all, from the pyramid to the hourglass. There is no one right structure but the one I am always uncomfortable with is the upside-down pyramid. When the majority of your team are gorillas on the top of the food chain earning big bucks, you are forever at their beck and call with little back up time developing those behind them.

DO YOU HAVE A TARGET STAFF MIX?  

Understand firstly how much profit you make as a % and $ value from each person. Group them into 3 bands – those that do less than 5% of the office sales, those that do between 5% and 10% and those that do more than 10% of the sales in the office. If you wanted to grow profit, who do you want to do that extra sale? The gorillas on the top commission rate or the monkeys that earn the highest profitability %.

Don’t underestimate the importance of having some chimps and monkeys around the place who do that 1 sale a month. As long as they pay their way, they will be the future of your business.

John Knight
read more by John Knight

John uses his business improvement and strategic planning skills to help his clients improve their position and boost their profits. John helps his broad client base with his unique business improvement services, strategic planning skills and wealth of knowledge on compliance matters.

Further to his business improvement offering, John provides company and business valuations for various purposes including company purchase/ sale, entity reorganisation and matrimonial or dispute resolution.

John is an expert in all things real estate and has built a reputation in the industry for being far more than just an accountant. He also has an in depth knowledge of the Dental sector and works closely with dentists and dental practices to streamline their accounting processes.

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